Shut Up & Wait

Your stocks don’t make money on trading days. They make money when you sleep.

As an investor, my foremost priority is to have a good night’s sleep. And to do so, I follow these two rules
1. Never use leverage to buy stocks.
2. Read this page and “Shut Up & Wait”.

Why is this chart important though?

First of all, this page is inspired by Morgan Housel’s book – The Psychology of Money.
In the book, he says, “…when compounding isn’t intuitive we often ignore its potential…”.
Simply, the real money is made when compounding kicks in. But we as humans, sometimes ignore its potential and start making trades. But if you see the bigger picture, which is this chart – it is evidently clear that your money is going to compound if you just – Shut Up and Wait.

As I have moved towards investing in Index Funds majorly, this is an S&P 500 chart.

Note – Returns as a Status

I am writing this note to my future self. In the era of social media and rapid investor growth, the world will see returns on investments as a status quo (just like an iPhone).
So in an effort to match up the status quo, we might tend to make trades instead of shutting up and waiting. This is a reminder that the status quo is not a priority. And the real gains are done in the long haul.
Taking it from Morgan’s book,

“As I write this Warren Buffett’s net worth is $84.5 billion. Of that, $84.2
billion was accumulated after his 50th birthday. $81.5 billion came after he qualified for Social Security, in his mid-60s.”